Promoting Innovation and Entrepreneurship in Eastern Europe & Central Asia: Strategies and Partnerships

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized INFORMATION FOR DEVELOPMENT PROGRAM Promoting Innovation and Entrepreneurship in Eastern Europe & Central Asia: Strategies and Partnerships Kiev, Ukraine June 9-11, 2005 Workshop Report 37862

2 CONTENTS Participants...3 Goals of Workshop in Kiev...3 Opening and Setting the Scene...4 Workshop I: Policy Framework for Innovation and Entrepreneurship Support...4 Workshop II: Development of Innovation and Entrepreneurship Support in Eastern Europe and Central Asia...5 Open Forum...5 Training 1: Monitoring Evaluation and Impact Assessment (MEIA)...6 Training II: Managing an Incubation Program ICT and Outreach...7 Training III: Network Development...8 Breakout: Monitoring Evaluation and Impact Assessment (MEIA)...9 Breakout: ICT and Outreach Working Group Report Breakout: Network Building Working Group Report Resource People Comments and Observations Program for the Regional Innovation and Incubation Capacity Building Workshop List of participants Draft Memorandum Page 2

3 Participants Sixty one participants from 18 countries attended the workshop in the Bratislava Hotel in Kiev from 9th to 11th June. The majority were managers and staff of incubators and other innovation and entrepreneurship organisations, along with policy makers from Ukraine, Belarus, Georgia, Kazakhstan, Kyrgyz Republic and Russia. Goals of the Workshop in Kiev The workshop involved plenary sessions, three break-out groups (ICT and Outreach, Monitoring Evaluation and Impact Assessment and network Development and Management), informal networking and a working visit to the Bila Tserkva Incubator. The detailed agenda is attached and presentations are to be distributed on CD. The main goals of the workshop were to capture and synthesize lessons and knowledge and identify regional commonality or differences, with: o Sharing experience and lessons learned in the projects of infodev grantees and other innovation and entrepreneurship development projects, particularly those involving ICT o Thematic sessions on the role of government and the enabling environment, financing gaps and support policies, entrepreneurship and innovation, ICT and business development and successful business incubation practices o Training and professional development. o Agreements on concrete steps for network development and assignment of (voluntary) activities to network partners o Site visits o Next steps to develop activities in the Regional Network Although time for preparing the workshop was short, the main goals were achieved. The workshop showed the commonality of issues in ECA countries, as well as the enthusiasm and commitment of participants to learn from each other and work together to overcome difficulties. Interestingly Steve Giddings, from South Africa, found the ECA experience to be of great value for Africa and of more relevance than the well promoted technology incubator experience of the USA and other developed countries. The three working groups are continuing outside the workshop. Grantees presentations gave an impressive picture of the results they have achieved with their projects and (despite of) the differences in environmental conditions. Of note were: the quality of presentations the level of ICT use It was clear that infodev has made a difference and that grantees have learnt how to present professional and ready to exchange experience and are ready and willing to learn. Presentations and discussion showed that good practices in different sectors of business incubation have been developed that can be transferred to other projects within and outside the ECA region. The workshop was very timely for the Ukraine, with a new government, good involvement from policy makers and in advance of new strategies that are being developed for incubation. Examples were given of how incaubtor lobbying had resulted in new legislation (e.g. Ukraine, Belarus, Kazakhstan and Russia). One quote summarizes the context, impetus and feeling developed: incubators enable the environment Page 3

4 Opening and Setting the Scene Paul Bermingham, World Bank Country Director, Ukraine, Natalya Kozhevina, UBICA, Ukraine, Andriy Tarelin, UBICA, Ukraine, and Vivek Chaudhry infodev opened the workshop. Ksenia Lyapina advisor to teh President of Ukraine and Head of the Entrepreneur s Council was delayed and spoke separately later in the day. Of note was Vivek Chaudhry s redefinition of incubation which encapsulated the challenges and themes: A new definition of incaubtion I: innovation and not just entrepreneurship through ICT N: network and collaboration C: competitiveness U: understanding the role of each of the public and private sectros B: buy in A: access to resources financial, connectivity and information for incaubtors and for clients T: technologies O: outreach R: review continuous. Workshop I: Policy Framework for Innovation and Entrepreneurship Support Participants found the workshop sessions on government and policy maker experience and achievements, which provided an overview, interesting. However many participants felt these presentations took too much time and did not leave sufficient room for discussion. In some countries of the ECA region the political environment for starting and developing businesses does not provide the necessary support. Structures for promoting SMEs are not developed and the concept of entrepreneurship needs to be marketed. Mr Babtybek Meimanov, Deputy Director General, State Centre of Innovation Technologies, from the Kyrgyz Republic talked about how the government is seeking new approaches to innovation and investment policy to address the countries balance of trade problem s by innovation and import replacement. Business incubators are a new development in the Republic. Ms Zamira Akbagysheva fromt eh Kyrgyz Republic also spoke. She said that there was a lack of IT in rural areas of the Republic with 85% of the rural population having no access. Plans were in place to introduce fair on-line and distance education programmes with main donor funding from DFID and USAID. Mr Todor Yalamov from the Applied Research and Communications (ARC) Fund in Bulgaria talked about the work of the ARC and a policy for incubation that is more about networks than buildings, bringing all stakeholders together and taking account of the external environment. He made the point that there is a danger of stimulating not what you want referring to low value added employment as opposed to high value added innovation. Furthermore, the Bulgarian experience is that 80-90% of funding goes to running costs of very established institutions and only 10-20% to real innovation and innovation is further restricted by a serious gap in private sector R&D Ms Inna Bondarenko, from the Russian Ministry of Economic Development and Trade, spoke about how the Russian Federation Government is supporting the development of structures and infrastructure to support small businesses and business incubators with funding being awarded under a competitive tender program. From 2006 to 2008 this will be extended to the Municipal level of government as well. Ms Sharapiyeva from the Kazakhstan Association of Business Incubation Centres (KABIC) spoke about the development of 43 business incubators and technology parks in Kazakhstan and the KABIC network. She noted that of the 43 only 8 really meet the requirements and that there were excessive tax and statutory burdens and a problem of a lack of investment for companies in business incubators. Page 4

5 Mrs Ksenia Lyapina, Head of Entrepreneurs Council and Advisor to the President of Ukraine spoke about how incubation is to be a strategic point in the new strategy being developed for entrepreneurship. She noted that while there were 2million small businesses their economic development potential and impact were poor and that there was a the need for a better enabling environment and to stimulate the growth and transition of small businesses to large and medium businesses; something that is rare at the moment. Other problems she noted included: access to capital; the corrupt judicial system; obsolete and worn out infrastructure. She is impressed by the UBICA infodev project, a trail blazer and (I) hope it will have followers and the work of the workshop, the sharing going on today is invaluable. Workshop II: Development of Innovation and Entrepreneurship Support in Eastern Europe and Central Asia Presentations from practitioners in Armenia, Azerbaijan, Kyrgystan, Kazakhstan, Romania, Russia, Belarus, Turkey, Ukraine and Uzbekistan gave an overview of what is happening in the region and the lessons learnt. The presentations were of a high quality and are being cut onto CD. The presentations from infodev grantees and other organisations ranged from private technology incubation through to non-profit mixed incubation and covered traditional physical incubation and innovative virtual and outreach services. Presentations and discussion showed that good practices in different sectors of business incubation have been developed that can be transferred to other projects also outside the ECA region. Some of the salient points noted include: Recognition of the need for better transparency and openness to reduce corruption Better economic policies to improve the enabling environment Regulatory reform and Too many obsolete and contradictory laws (Ukraine) The importance of raising awareness of stakeholders Poor ICT infrastructure and awareness, high Internet costs and poor use of ICT by SMEs Low ICT literacy among specialists and entrepreneurs alike The potential importance of distance learning for SMEs in rural areas How portals and virtual incubation are delivering information and support The importance of knowledge partners Lack of market knowledge by SMEs Low levels of cooperation amongst SMEs The dangers of low cost labour competitiveness as opposed to innovation Development of innovation cultures and national innovations systems and how ICT is a pioneer activity towards innovation (Poland) Better IP Protection The importance of public private partnerships and links with universities and the requirement for more entrepreneurial academics Problems of raising capital for SMEs Differing approaches to sustainability The continued requirement for incubators to prove the need for their existence Open Forum The Open Forum highlighted specific needs of participants for developing more experience, including: o Types of incubators (for profit, not-for-profit) and their relevance o Development of (new) services for incubators o Quality of incubator services o Incubators need to create a common appearance (e.g. Internet) to increase visibility and understanding (Lubov Maksimovich, Ukraine) o To help developing quality and outreach of incubators benchmarking, lobbying and training are the key issues for networking (Tatyana Shpuling, Kazakhstan) o Integration of innovation support strategies o Development of (inter-)national networks ( incubator of incubators, Inna Gagauz, Ukraine) Page 5

6 o Networking of incubators will improve outreach of individual incubators individual incubators will not have to re-invent the wheel (Kairat Sugurbekov, Kazakhstan) o Direct personal contact is needed for exchange of information, knowledge and views this is why we overspend coffee breaks we have something to tell to each other (Marina Gill, Belarus) o Self-sustainability (what this means and how to achieve) o Incubators often develop towards commercial (real estate) operations because support for the core incubator functions (business advice) is not available and incubator clients are not able / ready to pay for such services (Kairat Sugurbekov, Kazakhstan) o Problems over buildings and how to work with local authorities (Krygystan) o Better understanding of how incubators interrelate to local government o The need for advocacy to policy makers, via networks, for better understanding and policies for business incubation o The need for lobbying to be backed by good benchmark and performance data o Information on whether particular law as are successful or not and examples of legislation and policies that have been beneficial for SMEs The two open forum sessions could have been far longer and generated enthusiastic debate and sharing of experience. A few quotes serve as the summary: When business incubators come together they look at the various ways of solving the same problems, e.g. synergy with local government ; Need to better communicate outcomes and lessons, e.g. expose our positive experiences to government (local) and work more closely with them ; and Networking is the answer to the questions and the prayers Training 1: Monitoring Evaluation and Impact Assessment (MEIA) Vivek Chaudhry introuduced the topic by talking about the importance of monitoring and evaluation for Incubators: Outlines the Incubator s accomplishments and impact to donors, partners and clients/beneficiaries Provide timely and meaningful strategic and operations feedback to incubator managers; manage risk Serve as a basis for comparison, over time for one Incubator, or with other Incubators Incubator Initiative: Outlines the Initiative s accomplishments and impact to Incubators, Task Managers, program managers, and the donors; have a view and basis for comparison across Incubators Identify and manage risk, especially for Incubators in the Network; target coaching and technical assistance and identify program improvements Strengthen regional and global networks through specific, identified needs and Technical Assistance. infodev Program: Outline the program s accomplishments to donors Identify strengths and best practices among Incubators; identify emerging local and program ICT needs Promote awareness and policy decisions on innovation and entrepreneurship support Gennady Aksenov the head of UBICA s advisory board gave a presentation about benchmarking in the Ukraine as a way of sharing positive experiences and in a context of stages in investment driven growth. He suggested two ways: comparison to a reference point, for example the best incubator in Ukraine; and the level of organisation in a business incubator with the synergy factor they have developed. The synergy factor measures the reduction in costs for an SME flowing from use of a business incubators services and sharing of costs, thereby allowing an SME to purchase services they would not be able to afford otherwise. Page 6

7 Stefan Schandera, a consultant working in Kazakhstan and Uzbekistan spoke about his work in Kazakhstan developing monitoring and evaluation systems for their incubators and raising the awareness of government. Julian Webb introduced the draft MEIA tool being developed for infodev to use with its grantees and more broadly, gathering base line and performance data under the following headings: 1. Organizational Profile 7. Incubator Services 2. Partnerships and collaboration 8. Clients 3. Context and Environment 9. Objectives Achievements and Challenges 4. Staffing and Governance 10. Outcomes 5. Documentation 11. Financial Performance 6. Facilities and infrastructure Monitoring and evaluation was discussed with interest in the breaks and other sessions. Nikolay Pall spoke about the outcomes of the Bila Tserkva incaubtor and the detaield data he has collected and how this advances lobbying and develops strength in incuabtors and their associations. Training II: Managing an Incubation Program ICT and Outreach The session involved three main presentation followed by three shorter presentations and many questions. Inna Gagauz from Karkov Technologies Centre of Small Business Development gave a presentation on how ICT has been used to improve their performance and services to clients. She covered the spectrum of their services including a loan program for clients with a local bank, training, consultation services, publication of materials, international programs, an Internet Studio and the Virtual Business Incubator program funded by infodev, incorporating a virtual office and accredited training modules. She noted that 79% of their income comes from services and that sustainability is their responsibility. Yuliya Kuznetsova from the NTCA BIC Project in Ukraine spoke about the Business Internet Centres (BIC) project which was funded by USAID. To date 7 centres have been opened in rural and underserved areas, as profit organisations providing training, office services, Internet, business consulting and legal services, printing and publishing services and sales of IT hardware and software. Of the 7 centers 4 are already profitable and they plan to open more BICs in under serviced areas, form an association and develop telecommunications cooperatives. Vladamir Ivanov from the Centre for Business Technologies Development, an independent NGO in Ukraine, spoke about the SME Toolkit project funded by the World Bank s IFC and the Norwegian Government. He spoke about how the project was initially not successful, but, following surveys of SMEs, it was redesigned and now is a portal for SME knowledge and information used by more than 1,000 unique users per day. Case studies and practical information on how to start and develop a business are the most popular components, with approvals and permits being one of the fastest growing sections. Replication in Belarus and Georgia is being considered. While the project was donor funded it is now self sufficient (2 years without donor support) as a part of the organization s business mix, whereby the Toolkit is used to develop their reputation (brand) and help find new clients to which they sell their other revenue earning services. There were many questions about the business model. Kairat Sugurbekov from the SOBDI business incubator in Kazakhstan spoke about development of their outreach services using ICT. A number of courses are being developed which will be delivered via their server to other areas of the large country. Oybek Rakhimov, from the Association of Business Incubators and Technoparks in Uzbekistan (ABIT) mentioned that the earlier presentations in this session were timely and needed. He noted the need for national languages so as to be able to reach out to the general population and the fact that only 33% of people in Uzbekistan know of the Internet and only 1% have access. Khachatur Khachikyan from the Via Sphere Technopark in Armenia spoke about the monopoly regarding telecommunications infrastructure in Armenia and how there is only one ISP, but that ICT is the fastest growing sector and ICT companies are breaking the boundaries. Page 7

8 Training III: Network Development Zafar Mukhitdinov, Associaion of Business Incubators and Techno Parks Uzebkistan, gave a presentation about the 36 business incubators in Uzbekistan their services and achievements. Activities include: education of unemployed people and SMEs, mostly to do with computer literacy; securing 30hectares from municipalities for business incubation; development of micro leasing companies to help self sustainability; training of incubator managers, publications and organizing discounts for SMEs. Andriy Tarelin, UBICA, Ukraine, gave a presentation about their infodev project which is overcoming previous problems. The project involves: developing an interregional information and communication environment for effective business incubator development; network development; professional development; advocacy and public relations; new technology adoption and quality improvement. A key tool has been the web Portal they have developed with partners and for network information and analysis. Also they have funded 11 sub-projects to build local relationships, strengthen information and communication capabilities and fr specialized training of local clients. Tatanya Shpuling from Kazakhstan gave a presentation on the Central Asian Business Incubator Network. She noted common characteristics of CIS countries as being: low cross border trade; political tensions and small domestic markets, which will force companies to become international if they want to grow. She outlined the results and lessons of their work since 2002 noting: client interest in cross border trade is low; business incubator managers have low e-readiness; on-line communities require community management as well as e-readiness (the first attempt at an on-line community was cancelled after only 3 months but an on-line market place is being discussed again) and content needs promotion; collaboration of incubator managers needs to start in specific functional areas; a Russian language shared knowledge base is needed; for sustainability the community needs to be involved. CABIN has developed a network of training centres that share courses and, interestingly, the final agreement was reached at the Global Forum in Delhi, in a restaurant, something that would not have been possible on-line only. Steve Giddings from South Africa spoke about his experience helping to develop the African Regional Network. He raised a number of interconnected points/lessons, all of which are needed for a network to operate successfully: 1. Creation of trust and legitimacy 2. Communication 3. Participation, physically at least once per year to refresh and build relationship that can be sustained in between on-line 4. Cluster around particular topics, for example, in Africa, what is the best business model? 5. Develop a sense of community and brand, for example Proudly African which was developed at the Global Forum in Delhi in Leadership, which can be difficult when everyone has a full time job. It was apparent that training for business incubation and innovation as well as network management is needed. Targeted initiatives have been undertaken, namely in Kazakhstan and Ukraine, but exchange of experience, collaboration to share modules, and further development of training content are needed. Page 8

9 Breakout: Monitoring Evaluation and Impact Assessment (MEIA) Participants Luba Maksymovych (Ukraine), Stefan Schandera (Kazakhstand and Uzbekistan), Hanzade Avci Saricicek (Turkey), Anar Muhmudov (Azerbaijan), Sophia Muradyan (Romania), Abay Saplanov (Kyrgyz Republic) Moderators: Julian Webb, Vivek Chaudhry and Hanzade Avci Saricicek Over two sessions the working group considered the two parts of the draft data gathering instrument in detail. The two parts comprised 55 pages under eleven headings and a client questionnaire to be used by incubators. The first part, the longest, largely focuses on base line data, with the second part focusing on outcomes and achievements. The working group agreed that the draft tool, when finalised, can be very useful for incubators to assess themselves, while providing useful information for infodev. They provided valuable and detailed feedback about the data gathering instrument and agreed to continue providing comments upon future versions of the instrument and helping with the eventual analysis. In short, the working group constitutes an ongoing MEIA working group. The greatest interest was in the outcome and impact assessment components of the instrument and all working group members felt this was very important. There was much discussion about how the data would be analyzed and people realized that a deep and rich data set would be developed that could be a source of data for many different analyses. Comments made were very detailed and are being incorporated in the draft instrument. Some of the more general comments were: It is too long. Make it simpler and more concrete so respondents can understand what is expected of them Simpler wording and more explanation of terms Some of the generic questions need to be dropped Less open ended and more multiple choice questions Include a navigation checklist to help people go through the document Include the anticipated time to complete at the beginning Include instructions noting it is being ed and expected to be completed electronically Expand the outcomes section and in particular client economic data, which is critical for the incubators to asses themselves The client questionnaire should be circulated by the incubators concerned and they should input data into an Excel sheet provided for that purpose, which should then be ed back to infodev. Stefan Schandera offered to translate the client questionnaire into Russian. When the system becomes operational a tool can be developed from what is being used to be web-based and accessible from idisc There was an expectation that if this tool is implemented successfully then it would substitute for one of the progress reports. Stefan Schandera agreed to provide a block of questions about marketing capability, an important area in which he has specialist expertise. Page 9

10 Breakout: ICT and Outreach Working Group Report Participants: Todor Yalamov; Aigerim Sharapiyeva; Sergiy Fatiy; Oybek Rakhimov; Tatyana Tatyanka, Vazha Goginashvili. Moderator: Steve Giddings The ICT and Outreach Working group consisted of a small number of participants who first discussed what they were doing and how ICTs could assist them to do this better. This discussion ranged from deep technical (e.g. the need for XML coding) to the non-technical and participants clearly had different ICT skills levels. The group identified that ICT would facilitate interactions between three sets of players: 1. Business Incubator to Business Incubator 2. Business Incubator to Client 3. Business Incubator to Stakeholder Each of these interactions could be managed through a portal and this was depicted in the following slide: Centralized ICT Portal Outside information BI to Clients BI to stakeholders Inside Information BI to BI However, it was the business incubator to business incubator linkages that this group saw as most important and where most of the work focused. The following diagram indicates this and the group all agreed that while they had outreach activities in place, stronger incubator to incubator linkages would benefit outreach activities more than a focus on just strengthening these outreach linkages. Stakeholder Network promotion MIS training FAQ System sharing Forums Tech brokerage Incubators External clients Page 10

11 The group identified a number of actions that would strengthen these linkages and motivated why they were needed and how they d be attained. It was decided after a first attempt, not to identify the drivers until the Network Group had discussed mechanisms for participation. What Why How Who When Funds 1. Portal for Network 1.1. Technology Technologies acceptable to many potential user Co-coordinator + team to identify best way forward Sergey month 1.2. Content Need specific knowledge sharing Each incubator led by a template approach Cocoordinator +incubator 1.3. Participation Need to get participation for critical mass and active use Use network being created Network participations Ongoing 1.4. System and Services Audit To know what each incubator has and change 1.5. Search Engine To access required information fast List of system + services from each incubator List provided to all participants Develop or buy as required Cocoordinator +incubator Cocoordinator + team 3-6 month 1.6 FAQs Avoid duplication Informative Reduce time 1.7. Forums - manager to manager - manager to client Allow discussion between incubators and clients to Source and disseminate knowledge Incubators provide FAQ List to coordinator for integration and posting Part of portal promotion Cocoordinator + small team Moderator + portal development team 2 month What Why How Who When Funds 2. Incubator staff e- learning Develop better management and create better Regional sharing of existing documents and Page 11 Capacity building group 3-6 month ongoing

12 efficiency + effectiveness development of courses 3. Knowledge Management To capture and generate knowledge for sharing Determine if this exists then acquire or develop InfoDev or WB 4. Technology Brokerage Meet client needs, and gain markets, finance, and partners Integrate exist system (information retrieval system) Cocoordinator + small team 3-6 month 5. Network Promotion Image reputation attract more resources SEO Targeted info exchange Cocoordinator + small team 3-6 month Timing and funds required were also difficult to quantify but estimated timing was included. The portal was seen as providing a means of communication, reducing duplication, as well as allowing incubators to share systems that each had developed and good for publicizing commercial training courses etc for sale. This would be supported by intelligent search functions and a common FAQ section In addition to the portal, the group noted the need for increasing ICT skills of the staff in incubators and that this would be facilitated by a capacity building group. Internal needs also required that a knowledge management system be made available to capture more of the current tacit knowledge which is often lost as people move. It was suggested that maybe the World Bank had supported the development of such a system previously. The technology brokerage was proposed as a way of introducing clients to other incubators and their clients and to expose technology to external funders and potential partners. It was seen as a service to clients. Network promotion would ensure that stakeholders had access to a single view of all participating incubators and could be based on a structure proposed by Sergiy Fatiy. Members of the group were highly motivated and a lot of discussion revolved around how such a portal should be structured to allow minimal upkeep time and Sergiy Fatiy s proposal was well received as it would allow mininum inputs and reduce duplication of incubator portals. He proposed that this be fleshed and proposed to the group in due course. Moderator s comments: This was a difficult subject to discuss in the short space of time provided as much of what was needed required detailed technical considerations which were beyond the scope of the time period and the understanding of some participants. One participant commented that not enough time had been provided for discussing the importance of some of the suggestions and that it felt rushed. This was in fact very true and clearly there needs to be follow up activity in the region to get more rigorous debate going on needs and solutions. Page 12

13 Breakout: Network Building Working Group Report The following notes were taken from the workgroup Network at the infodev Regional Innovation and Incubation Capacity Building Workshop, June 11, 2005 in Belaya Tserkva, Ukraine. Workshop participants Zviad Archuadze, Zamira Akbagysheva, Larisa Brovarska, Olena Bulba, Domnica Cotet, Inna Gagauz, Marina Gill, Nataliya Kozhevina, Nataliya Lazarenko, Zafar Mukhitdinov, Tatyana Shpuling, Kairat Sugurbekov, Isabella Stelmaszewska, Andriy Tarelin, Tamara Ahrimenko. Moderators: Heinz Fiedler, Krzysztof Zasiadly Expectations The workgroup session began with collection of the expectations of participants: What do you expect to receive from the network within the next six months was the question to answer. The answers are shown in the following overview: Expectations (unsorted) 1. Communication 2. Coordination 3. Training 4. Financial success 5. Add services 6. Improve image 7. Contact with local administration 8. Passive reverence 9. Technology Business Innovation Centers 10. Information about members 11. Information about training programs ( consulting) 12. Information about changes in low and regulations 13. Data base of projects ( Joint projects) 14. Distance education 15. Partner relations between clients 16. New partners 17. Breading of scope of cervices 18. TBIC certification 19. Start technology transfer plus training center 20. Improve the quality of my life standard 21. Info on innovation center activities in other countries Network Activities The following discussion resulted in grouping expectations and defining five areas of activities important for project work within the network (the named network members volunteered to coordinate activities for the respective topic during coming months): Synergy: Tanya 1. Improve image / promotion +PR + Marketing 2. Improve quality of incubation services 3. Coordination 4. New partners 5. Promotion of BI Information: Jevgeny (Tanya) 1. Information about services provided by incubators Additional services for incubators 2. Service types 3. Information exchange on activities of members 4. Clients activities: data base and information exchange 5. Legislative basis for SMEs + incubators / Information on changes Technology transfer: Domnica 1. Data base joint technology transfer projects 2. Potential for international project cooperation 3. Certification of technological innovation Training: Tanya / Aliona 1. Communication & exchange of experiences 2. Consulting cervices 3. Distance education 4. on / off-line forum 5. methodology / Curricula for training 6. data base on / exchange of training materials Finance: Zamira 1. Self sustainability of incubators 2. Financial success 3. Passive revenue 4. Sources of finance for start up 5. Finance for SMEs Page 13

14 Network members and Target Groups The third part of workgroup discussion was focused on the target groups / beneficiaries of the network. Following table provides an overview on the results: Target Groups 1. Local State Authorities / Ministers 2. NGO managers 3. Business Incubator managers + staff 4. Business Incubator clients 5. Training centers+ trainers 6. clients of training centers 7. BI networks & associations (international) / 6. Business support centers, Entrepreneurship support organizations (internet) Membership in the Regional network: 1. Business incubator and innovation center managers 2. Training center managers 3. National and regional networks and associations 4. Business and entrepreneurship support organizations Potential Member (not yet decided) 1. Business Incubator Clients 2. Local and State Authorities Decision regarding membership in the Regional Network was taken on four categories of (full) members: Business incubator and innovation center managers; training center managers; national and regional networks and associations; business and entrepreneurship support organizations. Regarding the remaining two categories (business incubator clients / SMEs and local and state authorities) a final decision was left open. While part of the workgroup participants preferred to invite these groups for membership, others argued these categories should not be included as members because Incubators clients are the target group, the business partners to serve. The network should focus on providing better services to incubator clients and market mechanisms will be the indication of success. The opposite opinion was to integrate this group to learn better about their needs and together develop better services Local and state government is the target group for acquiring (financial) support and for lobbying by the network activities. It could become difficult for government representatives providing (financial) support to the network and its members when at the same time being members of the network. The opposite opinion was based on similar considerations as for incubator clients. As an option, a category of associate membership could be offered to these groups. During the coming process of developing the regulations for the Regional Networks as well as the activity plan discussion regarding membership will continue and decisions will be taken. For all (Groups of) Members the most important questions to be answered are: What do they want to get from the network? What will they give to the network? Network Structure and Organization The fourth part of workgroup discussion focused on the question How to organize network? For this part of discussion the Draft Memorandum (see attachment; distributed to most of the workshop participants prior to the event) was referred to. Main topics of this discussion were: 1. Formal or Informal Network? The workgroup discussed expected advantages of establishing a formal network: easier access and acquisition of project finance. On the other hand participants agreed that establishing a formal network would need more discussion, finance, and time. Additionally, the common view was that financial support for the network itself hardly could be expected from any source and project finance could be taken care of by selected (groups of) members. Discussion resulted in opting for an informal network. 2. Sub-networks Page 14

15 The geographical area covered by the planned Regional Network is large and includes countries in very different situations (policies, economy, social situation etc.). Therefore participants agreed that most likely sub-structures of the Regional Network will become necessary - geographically (for example based on already existing structure like CABIN) or - organized with a focus on specific themes (like the areas of activity defined during this workgroup session) 3. Internal structure The proposal included in the Draft Memorandum will serve as a basis for the time being. Changes may occur if discussion in coming weeks will show that (potential) network members see a need for adaptations. 4. Project acquisition The start of activities within the Regional Network will be based on members resources. In case the aims defined for the areas of activities cannot fully be achieved with resources available, at a later stage, facial support should be acquired from national or international sources. 5. Brand The need for developing the regional network as a brand was appreciated by the workgroup participants. This would significantly help with achieving the lobbying goals of the network. However, it was understood that developing a brand will need effort and time. 6. Certification Directly related with the aim to develop a brand are matters of securing and improving the quality of incubation and innovation support services. Certification (of incubators / technologies) was being considered as one possibility for supporting the development of a brand. However, disadvantages of certification are seen as well. This matter will need further discussion between network members possibly with external input / advice. 7. Competition Existing national, regional and international networks / associations are invited to become member of the regional Network, Their interests and concerns therefore can be taken into consideration from the very beginning of network activities and (unnecessary competition can be avoided. In general the regulations proposed in the draft memorandum were seen as a good basis for further discussion. However, all participants of the workgroup as well as the workshop are invited to comment on this proposal. For this purpose the final part of the memorandum (network project) will be adapted by integrating the areas of activities developed during the workgroup session. Next steps For all areas of activities voluntary co-coordinators were approved to help organizing the following steps aimed at establishing the Regional Network as soon as possible. The following action plan was approved by workgroup participants: Action responsible target date 1. prepare summary draft action plan based on workgroup Coordinators discussion 2. Comments on draft action plan / further proposals All Comments on draft memorandum All Integration of results (actions & organization) into Draft All Memorandum 5. Integration of results (actions & organization) into Draft General coordinator* Memorandum 6. distribution of final Memorandum to all parties interested General coordinator* Agreed memorandum All *) GMC General Memorandum Coordinator Andriy Tarelin if needed supported by resource persons (H: Fiedler, K. Zasiadly) Workgroup participants agreed that the action timing for the next steps is ambitious. However, as the building of a regional Network is seen to be important for increasing the exchange of information and knowledge as well as developing a better basis for (project) cooperation and development of business incubation as well as entrepreneurship and innovation support, all participants agreed to invest time and efforts to get this activity started as soon as possible. Page 15

16 Resource People Comments and Observations The following comments and observations were prepared by the resource people involved in the workshop (Heinz Fielder, Krzysztof Zasiadly, Julian Webb and Steve Giddings). General Business Incubation problems are similar in all participating countries, although, depending on the specific local environment, the approaches are different from social, via general entrepreneurship information and promotion, to technology based business incubation. This variety provides an excellent basis for learning from each other. The workshop showcased many good practices that can be shared including: Kharkov - distance learning and consulting ; Ankara - Business Incubator related to CyberPark ; UBICA Training Center serving outside clients; CABIN international co - operation; Ukraine - Business Information Centers and SME Toolkit project Generally the practices in Kazakhstan, Uzbekistan and Ukraine are more advanced than other countries. External support is needed to develop (case study) materials based on the good practices available. There are some issues which were not clear to some participants in the workshop, in particular: selffinancing, sustainability, for profit as opposed to non-for profit incubators, quality measures of business incubator operations and impact. ICT tools are new in many developing countries and need to be used according to the capabilities of clients and existing technical infrastructure. Participants recognized the importance of a workshop not only for exchanging information between attendees, but also for raising awareness in the host country. Therefore infodev should actively draw attention to this potential and consider allowing grant funds to be used for follow-up (sub-regional) workshops. MEIA The need for Monitoring and Assessment (MEIA) was not only confirmed by the interest in the respective workgroup, but also in discussions throughout the workshop, which showed that many grantees are interested, but need tools and training in this field. Some however, do not appreciate monitoring and evaluation as their problem; there is a danger that they may consider monitoring as tool of InfoDev to control grantees. The most important task is to help them understand how monitoring and evaluation can help achieve their objectives and to integrate MEIA systems and tools into their daily work (and not just making it a must as long as the project finance lasts). This aim can be achieved by integrating MEIA into activities of the network. This also will lead to developing benchmarks based on regional practical experience and therefore with practical relevance. Networking The need and potential for continuing exchange of information, know how, experience, and contacts, and cooperation was obvious. Practical projects, with direct relevance for the work of grantees, are the backbone of network development. Collaboration in developing a common Internet presence and brand and in developing training programs offers a good basis for future development. The workgroups on networking, ICT, and MEIA started to show increased collaboration over the development of concrete proposals. After the workshop grantees took the initiative to generate more detailed proposals. Understanding of the needs and potential of networking differs throughout the region. Those with concrete experience (nationally as well as internationally) should be supported to further developing their experience and build leadership. There is a need for ongoing advice and support regarding network management. Networking as a whole needs more time, transparency, strengthened leadership, policies and procedures, but collaboration over MEIA and ICT are good start. Attendees with practical experience in networking (namely Kazakhstan and Ukraine) should be supported in further developing their skills to become network leaders. To build on existing structures is the fastest road to success and avoids competition. Trust between members is important for any network to succeed and the workshop helped reinforce and build relationships and trust between incubators in the region. Page 16

17 Differences between the countries in the ECA region means that Sub-regional (overlapping) networks should be developed / supported as needed / desired by network members / candidates. Management of the regional networks needs to take this aspect into account. ICT and Outreach The sessions on this topic were enthusiastically received and debated. Participants are keen to benefit form the experience of projects such as Kharkov, Business Internet Centres and the SME Toolkit project in Ukraine. The ensuing discussion on business models for each of these examples showed that people want to learn much more about how these technologies and services can be used to enhance sustainability. The learning from these examples is relevant to other regions and other projects that are developing portals. Governments and Policy Makers Governments in the ECA region do not yet adequately support entrepreneurship, business and innovation promotion national strategies do not yet exist. Some, such as the Ukraine, have good aspirations and there is a potential to learn from other more advanced countries in former Central and Eastern Europe (e.g. Poland, Latvia, Estonia). A separate workshop or conference especially for politicians could help create a more favorable political environment for ICT enabled Innovation and Business Incubation in individual countries. It could be the focus of future regional workshops or a part of a Global Business Incubator Forum. Expectations of infodev While after Delhi expectations were high regarding financial support from infodev for networking, the message was (at least partly) understood: that first ones own initiative has to be shown with use of ones own resources. Some participants still expected that new financial sources would be announced, despite all of infodev s announcements to the contrary. Practical support for developing the regional network is required and it should be used to foster self reliance. CABIN and Ukraine expected that proposals submitted to InfoDev in March would be discussed during workshop, even though this was not on the agenda. Participants: Attendees showed o high motivation and engagement for developing their projects successfully o sincere interest in learning from each other and readiness to share experience The practical experience of attendees is different (because they are in different stages of project work / incubator development) with regard to: o Business Incubation program development and operations o Extent of ICT use and skills o Stage of business incubation program development It is a mark of the success of InfoDev that the managers of InfoDev projects are task oriented, knowledge based and professional, using ICT for improving their skills and eager to learn. They stand out. Russian is the most important (common) language in ECA countries and needs to be used for national and international (within the region) cooperation. Although the participants (specifically infodev grantees) and the younger generation increasingly use English as the foreign language, Russian needs to be used for reaching the target clientele. However, it is worth noting that the younger generation in Georgia, Armenia and Azerbaijan does not speak Russian well. Because of language similarities, attendees from Turkey and Azerbaijan could easily communicate. Excluding the Ukraine, the other governmental representatives were not in charge of creating national policy. There should be more time in advance to select official representatives carefully from different countries in the region. Participants who were ICT experts were mainly focused on ICT instruments, improvements, concrete activities and documentation. They were business oriented. The minority of participants who were socially oriented seemed to understand better than others that networking is a process and needs time. They mostly spoke about qualitative measures and impact and expect external financing for their operation. Those who are advanced in Business Incubation program operations (Kazakhstan, Ukraine, and Uzbekistan) expected others to approve their leadership. However, there is no strong leader in the region that others would be eager to follow. Page 17

18 Lessons for regional workshops Incubator participants would have liked less time spent on government and official presentations; they would have been happier with half a day rather than almost one full day. Incubator managers, focused on their day to day work do not always see or appreciate the bigger policy perspective. For future workshops (also in other regions) more time for intensive preparation is needed. Materials like the Draft memorandum (and possibly MEIA) should not only be distributed, but also discussed prior to the workshop. This allows starting working on a higher level of understanding. A general overview of InfoDev grantees (and other participants) could be prepared in advance and published, as happened with the Global Forum in Delhi. This would help people get to know each other and what they are doing, thereby saving time at the workshop. The workshops should allow for more time for group work (thematic and sub-regional). This is an important interest of attendees, allows building on their experience, engagement, and motivation. This process needs information, support and guidance for the regional Liaisons. Workshops need after care. The results have to be fed into the network and proposals from attendees invited. This after care needs resources that cannot be provided only by grantees / participants themselves. Presentations of grantees and political representatives should be better prepared with guidance on how to structure them and templates. Presenters received advice and requests by prior to the workshop, but preparation time did not allow for checking the presentation material and advising presenters of changes required prior to the workshop. Templates should be structured in a way that allows the material to be easily translated into case studies. Page 18